VAT Ruling No. 017-90

January 22, 1990 VAT RULING NO. 017-90 Philippine Sinter Corporation 11th Floor, Allied Bank Center 6754 Ayala Avenue Makati, Metro Manila Attention: Mr . Onofre H . Molina Manager - Finance & Accounting Department S i r s : This refers to your letter dated March 14, 1989 requesting for a ruling on the taxability of fresh pineapple pulp being sold by the Philippine Packing Corporation (PPC) to your company which is a BOI-registered export producer. In reply, please be informed that, generally, the sale of fresh pineapple pulp for use as a non-food agricultural product is exempt from the value-added tax (VAT) only if sold in its original state by the primary producer. On the other hand, if it is sold as an agricultural food product, it is exempt from VAT in all levels of sales if sold in its original state (Section 103 of the Tax Code, as amended by E.O. No. 273). Since the fresh pineapple pulp sold by PPC had undergone a sophisticated process, it is subject to VAT. However, pursuant to Revenue Regulations No. 2-88, the sale of fresh pineapple pulp by PPC to your BOI-registered company can qualify for effective zero-rating provided that: llcd (a) Philippine Packing Corporation files an application for zero-rate at the VAT Division of this Office; (b) The raw materials sold to your company are to be used exclusively in the manufacture, processing or repacking of your own registered export product; and (c) Your company exports at least 70% of the total annual production as certified by the Board of Investments. (d) The words "Zero-Rated Sales" are prominently indicated on the sales invoice. Please be guided accordingly. cdll Very truly yours, JOSE U. ONG Commissioner of Internal Revenue